The project is aiming to define a JORC-compliant mineral resource estimate for one or more of the Melville Bugt iron ore target areas by gathering up to between five and six thousand metres of diamond drill core.

It will also continue the detailed reconnaissance mapping it started during its maiden field season last year.

“The promising mapping, assay and geophysical survey results obtained by Red Rock Resources at Melville Bugt during 2011 indicate the potential for economic quantities of both magnetite and haematite iron ore mineralisation,” it said.

The field season will run from late May until early October with drilling expected to proceed from early June and end in September.

Twenty-four hour daylight begins in late April but sea ice limits boat access until June, so Red Rock will initially set up an air-mobilised base camp, with two heli-portable diamond drill rigs for exploration drilling.

Once the sea ice subsides in late June, it will be able to carry over a larger drill rig by charter vessel to commence a larger-scale drill programme.

It said is funding the 2012 Greenland exploration programme with resources received from the royalty sale transaction with Anglo Pacific, as well as from other liquid assets and facilities. 

Red Rock, which also has a Colombian gold-producing mine and a Kenyan gold and copper project, has an earn-in agreement with North Atlantic Mining Associates (NAMA) under which it has already earned 25 per cent in Melville Bugt.

It has the right to increase this percentage by 60 per cent by funding 2012 exploration and declaring a JORC or NI 43-101 resource.

The share price rose 11 per cent to 1.94 pence.

RSL has agreed to buy an 80 percent stake in Livingstonia from Globe Metals and Mining in addition to the 20 percent interest it already owns.

Globe will at the same time buy the remaining 80 percent of the Machinga niobium-rare earth project from RSL and the two companies will grant each other a gross revenue royalty interest of 0.7 percent for Machinga and one percent for Livingstonia.

There is no cash component to the deal and the difference in the royalty rates is due to the different levels of advancement of each project.

Livingstonia currently has an inferred mineral resource – which is compliant with the JORC standard – of 8.3 million tonnes grading 325 parts per million of uranium containing six million pounds.

The agreement with Globe Metals will enable RSL to concentrate on a uranium property with scope for resource expansion that it believes is an “attractive asset”, said Red Rock.

"We believe this restructure is in the best interest of our shareholders as it strengthens our focus on our key project in Livingstonia, where there is great potential for future growth,” said managing director of RSL Simon Heggen.

“We are currently planning the next round of drilling at Livingstonia and our exploration manager has recently returned from Malawi, following meetings with contractors, suppliers and Malawian government officials, in order to map out the program.”

RSL will outline these plans to shareholders once they are finalised.

According to RSL, the project has a very prospective exploration ground and the deal gives RSL flexibility in determining the work programme and the timing of expenditures in a “challenging capital markets environment”.

The company added that the deal is a very low absolute cost acquisition.

Back in March, Red Rock increased its stake in RSL from 24.57 percent after participating in a rights issue, which saw the company raise A$838,563.

Early in the year, Red Rock agreed to sell its interest in Paraguay operating uranium company Cue Resources to US-based Uranium Energy Corp, saying part of the proceeds would be invested in RSL.

“This will create a stronger company able to explore its portfolio of assets and potentially to look at other opportunities within the mining sector,” Red Rock said at the time of the announcement.

“In addition, the refinancing of RSL may itself improve sentiment towards the company and, in potentially increasing its shareholding in RSL at a historically low price Red Rock expects to make a profit.”

The infill drilling results from the Nyanza prospect, revealed in an after-hours statement yesterday, show the group’s progress towards the completion of a resource estimate for the Mikei gold project.

Nyanza is one of five linked deposits within Mikei. The latest drill results include high grade intervals, reaching 43.3 grams per tonne (g/t) gold.

The best results from 3 holes included 2 metres grading 14.7 g/t. As well as 2.6 metres at 32.9 g/t gold and includes a one metre interval of 43.3 g/t. The third hole cut 31 metres at 3.91 g/t and included two higher grade assays - 1.5 metres at 27.7 g/t and 7 metres at 9.8 g/t.

Nearly 11,000 metres of drilling has been carried out by Red Rock at Nyanza to date.

The Nyanza area was mined back in the 1960s with an estimated 126,000 tonnes being mined at a grade of 23 grams per tonne. 

And the whole Mikei project was estimated, by a previous operator, in 2006 to contain 1.17 million ounces of gold. However Red Rock says that estimate used limited structural control and there were concerns about certain aspects of the estimate.

Its current operation is focused on the preparation of a new resource estimate for Mikei, by assessing each deposit sequentially.  

It said that this will be done to JORC standards. It plans to integrate recent drill data from the other four deposits with the historic information.

“The aim of Red Rock's infill drill programme throughout has been to validate the existing information with additional high quality data, and to provide a robust geological interpretation to target extensions and high grade material,” the company said.

Red Rock Resources (LON:RRR) has appointed law firm Ariel Partners to help it simplify the ownership structure of the Migori gold prospect in Kenya.

Red Rock has a direct 15 per cent direct stake in Mid Migori Mining, the Kenyan firm that owns Migori.

The remainder of Mid Migori is owned by Canadian company Kansai. In February, Red Rock acquired options that will give it up to a 37.96 per cent stake in Kansai. 

Red Rock also said it has the right to farm in to a majority position in Mid Migori Mining by performing exploration work and is manager of the Migori project with certain additional rights.

Ariel has been taken on by Red Rock for an initial four months. Kansai has also agreed to deal exclusively with the law firm for three months on issues relating to the Migori project and assets.

Andrew Bell, Red Rock’s chairman, said: "The attribution of a proper value to the Kenyan assets is unlikely until there is a simplification in the holding structure and a unification of the various interests. 

This is what we have for some time sought, and we have every confidence in the capacity of Ariel, whose principal and consultants we have long known, to structure and carry though a transaction".

The Migori Project has a NI 43-101-compliant Indicated Mineral Resource of 1.172m oz of gold. 

Part of the project, the KKM area, has a more recent 2011 JORC-compliant Indicated and Inferred Mineral Resource Estimate of 0.577m oz of gold.

In addition, the Macalder tailings have a 2011 JORC Measured Resource of 68,000 oz of gold.

Red Rock Resources (LON:RRR) said infrastructure improvements at its Colombian operations have resulted in higher production at both the mine and plant in the first quarter.

In the first three months of the year, the company mined 6,110 tonnes of ore and processed 5,658 tonnes, up 13 per cent and 12 per cent respectively compared with the final quarter of 2011, while grades jumped 23 per cent to 10.7 grammes per tonne (g/t).

However, gold sales declined 19 per cent to 1,149 ounces from the previous quarter due to a decline in recovery rates at the plant.

Red Rock noted that monthly sales have picked up from a low of 312 ounces in January to 398 ounces and 439 ounces in February and March respectively as the company addressed “some processing issues” and recovery rates improved.

The company simultaneously announced the appointment of Peter Bolt as chief operating officer (COO) of the Colombian mining operations.

Bolt, who has been in charge of two operating mines in Colombia over the past six years, will be responsible for all operations at the mine.

“We welcome the opportunity to work with Peter Bolt, who has previous experience with the El Limon mine and whose judgement and depth of knowledge greatly strengthens our team in Colombia,” said chairman of Red Rock Andrew Bell.

Only yesterday, Red Rock reported significant initial drill results from the Migori gold project in Kenya. Laboratory analysis showed that new gold prospects had been defined, with five samples from three areas encountering more than 1 g/t gold.

Red Rock says that further analysis is being carried out and it intends to produce a report detailing results and potential targets, along with plans for follow-up exploration work.

The AIM-quoted firm completed a 8,500 metre aircore drill programme last year.

Laboratory analysis released today shows that new gold prospects have been defined, with five samples from three areas encountering more than 1 gram per tonne gold.

This initial process was effectively an untargeted regional sampling programme. And the findings included a coherent anomalous zone with greater than 0.1 g/t gold. This zone is 0.5 kilometres wide and it has a 1.5 kilometre strike length.

Separately, results from a further seven samples across four areas exceed 0.25g/t Au.

"Initial analysis of the data has already picked out promising targets in areas where highly anomalous results were returned,” said chairman Andrew Bell.

“We expect that continuing interpretation will identify further targets.

“The objective of this regional program has been to prioritise targets for future exploration in order to increase the gold resource base of the company."

Red Rock says that further analysis is being carried out and it intends to produce a report detailing results and potential targets, along with plans for follow-up exploration work.

CUE has focused on the exploration and development of the Yuty uranium project in southeastern Paraguay.

Red Rock Resources (LON:RRR) has increased its stake in associate firm Resource Star Limited (ASX:RSL) following a rights issue.

Previously, the firm held 24.57 per cent of Resource Star Limited (ASX:RSL), which is focused on uranium and specialty metals exploration assets in Australia, but now has 46.44 per cent of the enlarged share capital.

Today, Resource Star finalised the entitlement offer and issued around 41.9 million shares raising A$838,563.

Red Rock subscribed for around 13.22 million of these for A$264,497 settled by the extinguishment of debt.

It also subscribed for around 18 million shares under the underwriting agreement amounting to around A$361,976.

A substantial shareholder of RSL has committed on April 24 this year to taking the balance of 15 million shares, which were unsubscribed under the rights issue for A$300,000.

At that point, it is expected that Red Rock will hold 40.32 per cent of the enlarged RSL share capital.

As announced at the end of January this year, Red Rock has agreed to dispose of its interest in Cue Resources, which has uranium interests in Paraguay, to US-based Uranium Energy Corp.

As part of the rationalisation of its uranium investment interests, where negative sentiment towards the uranium sector was inhibiting the actions of both Cue and RSL, Red Rock expected to re-invest a proportion of the proceeds of the disposal of Cue into RSL.

"This will create a stronger company able to explore its portfolio of assets and potentially to look at other opportunities within the mining sector. In addition, the refinancing of RSL may itself improve sentiment towards the company and, in potentially increasing its shareholding in RSL at a historically low price Red Rock expects to make a profit," it had said.

Red Rock Resources’ (LON:RRR) annual results revealed it was something of a roller coaster year for the gold producer, which also owns iron ore and uranium assets.

The major financial landmark was a £798,756 profit from its Colombian gold mining assets. 

However, the group posted an overall loss of £3.8 million, which was in large part a result of “fair value adjustment” of convertible loans and options related to Ascot Mining.

Elsewhere, its 4 per cent stake in Jupiter Mines declined in value, meaning the company’s “available-for-sale financial assets” declined to £14.7 million as at December 31.

“As with Jupiter, so with Red Rock, we expect the remainder of 2012 and early 2013 to be a period where the company can show the results, and gain the reward, for many months of solid effort,” said chairman Andrew Bell.

“We continue to search for strong partnerships that can accelerate our growth and the development of our projects.”

The firm is doing so via a two- tranche placing of 30 million shares at 2.6 pence per share, it said.

Red Rock said 12 million shares would be issued in the first tranche on March 6, while the remaining 18 million shares would be placed in the second tranche on March 13.

The company is developing its business on a number of fronts focusing in particular on gold and iron ore interests.

Earlier this month, the firm announced it was set for a US$14 million boost after it agreed to sell half of its 1.5 per cent production royalty over the Mt Ida iron ore prospect  -  a 530 million tonne project in Western Australia.

Shares in Red Rock are now changing hands at 2.80 each, having closed yesterday at 3.04 pence each.

Red Rock Resources (LON:RRR) is set for a US$14 million boost after it agreed to sell half of its 1.5 per cent production royalty over the Mt Ida iron ore prospect.

Mt Ida is a 530 million tonne iron ore project in Western Australia. 

Jupiter Mines is developing the mine and it is currently completing a feasibility study for a 10 million tonne a year mining operation. The pivotal study is due by the end of this year.

Red Rock will receive US$14 million in three instalments from Anglo Pacific Group (LON:APF, TSE:APY).

First US$6 million will be paid for 0.3 per cent of Mt Ida’s production, a further US$4 million will buy an additional 0.225 per cent and a final US$4 million will buy the remaining 0.225 per cent.

Subsequently Anglo Pacific will own 1.5 per cent of the mine’s gross revenue iron ore royalty.

The payments will be made in either cash or shares.

Shares in Red Rock Resources (LON:RRR) were lifted this afternoon after the company released a positive scoping study for its Macalder tailings project in Kenya.

The study showed that the project could support an average annual production of 10.5k ounces and a four year mine life.

This is based on the current global resource announced in October last year of 1.286 million tonnes at 1.65 g/t gold and 33.5 g/t silver.

Key considerations to the document, which was completed by London-based Saint Barbara, were the preferred mining and processing routes, plant scale and costs, throughput rate, operating costs, project life, community and environmental impacts. 

The key findings were a life of mine of four years, average production of 10.5k ounces gold per year and a tailings reclaim rate of up to 328,500 tonnes per year.

The parameters included gold recovery of 61.5 per cent and a price for the yellow metal of US$1,550 per ounce.

Red Rock said that two versions of the base case scenario were modelled - the main difference being the costs associated with using either new or used processing plant and mining equipment.

Assuming a gold price of US$1,550 per ounce, both scenarios indicate the capacity to generate annual free cash flow of between US$5.6 to 6.8 million during production.

This indicates that the capital costs for the process plant and associated infrastructure could be paid back in under three years, the company pointed out.

The two scenarios produce a net present value (NPV) of around US$1.5 to 3.5 million over the life of the project.

Red Rock said it believed the positive results of the study for Macalder reinforces the firm's "strategy of boosting its exploration efforts with cash flow generative production projects".